MARKET PREVIEW: Techs may see red after Greenspan comments

January 2, 20024:43 PM PST

The interest rate oracle has spoken, and techs see red in their future. After a rough week, Fed chief Alan Greenspan has hit stocks with another inflation warning. Asian and European markets took a tumble, and the Dow is set to open lower.

U.S.

U.S. stocks are expected to take a sharp fall Friday after Federal Reserve Chairman Alan Greenspan advised banks to set aside more money as insurance against a big stock market downturn.

"History tells us that sharp reversals in confidence occur abruptly, most often with little advance notice," the inflation oracle said Thursday. While emphasizing he was not predicting a stocks crash, Greenspan told a banking conference that sudden losses in investors' confidence "inevitably" occur from time to time. The remarks are taken as a sign he is worried about a potential bubble in equity prices.

U.S. stocks went on a wild ride Thursday as the Dow Jones industrial average fell 99 points in early trading only to rally up more than 100 points for a short time. In the end, it closed up 54 points while the Nasdaq inched up 6 points to 2,806.84.

At the Bell

The Dow Jones industrial average may open 83 points lower. The Standard & Poor's 500 index for June futures contracts was down 10.3 points to 1280 at 7:51 a.m. EST in 24-hour electronic trading.